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Average Deal Size (ADS)


What is Average Deal Size?

Average Deal Size (ADS) refers to the average revenue expected from each closed deal.

How is Average Deal Size (ADS) used?

This metric is great for predicting revenue streams, informing pricing strategies, and assessing sales effectiveness – especially in up-selling and cross-selling. It informs whether to pursue higher volume with smaller deals or lower volume with larger deals. Successful companies leverage ADS to tailor their sales approach, improve Average Lifetime Value, and refine target market strategies. It's particularly useful when evaluating customer segments or assessing the impact of pricing changes.

How to calculate Average Deal Size (ADS)

Total Revenue in a Period / Number of Deals Closed in the Same Period

To calculate Average Deal Size, divide your total revenue within a specific period by the number of deals closed in the same period. It's a straightforward formula: Total Revenue / Number of Deals Closed.

Best Practices

When analysing ADS, segment data by customer type, sales channel, or product to prioritise the most lucrative deals. Employ it alongside Customer Acquisition Cost (CAC) for a holistic view of sales health. Focusing on cross-selling and up-selling can be effective in increasing ADS.

Common Misconceptions

A common mistake is equating higher ADS with better performance. This ignores deal complexity, sales cycle length, market limits, and Average Lifetime Value. ADS must be considered in a broader context to accurately gauge long-term business health and scalability.




What are the main drivers of Average Deal Size (ADS)?
  • Product pricing
  • Market demand
  • Up-sell/cross-sell effectiveness
How should I break down Average Deal Size (ADS)?
  • Industry vertical
  • Geography
  • Company size
  • Acquisition channel
  • Sales owner

Supported Integrations

Get this metric directly out of one of our supported integrations.

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